I would like to start by offering my sincere condolences to the people of Alaquàs, Albal, Aldaia, Alfafar, Algemesí, Benetússer, Catarroja, Llocnou de la Corona, Massanassa, Paiporta, Picanya, Sedaví, Utiel - and many other places in Valencia and across Spain - for the loss of lives and livelihoods caused by the catastrophic floods that began last week. Spain's Minister Cuerpo stayed in Madrid to deal with the emergency and was unable to join us today.
The European Commission will continue to provide all the support that it can.
Turning to today's business:
As Minister Varga said, ECOFIN agreed to update the EU's VAT rules to bring them in line with the digital age, keeping up with technological progress.
This is a significant advance in our fair taxation agenda and reflects new digital realities such as the rapid growth of e-commerce and people working on online platforms. It will make the EU's VAT system more business-friendly and resilient to fraud, by embracing and promoting digitalisation.
The changes agreed today will help governments to:
- recoup VAT revenues,
- strengthen the fight against VAT fraud,
- and reduce pressure on stretched public finances.
They also address VAT rules for the platform economy, setting fairer conditions for traditional providers that compete with digital platforms. And they make life easier for businesses by simplifying their obligations, with a single EU-wide VAT registration to reduce compliance costs for businesses operating across borders.
Turning to the EU economy: it is improving as we emerge from a series of crises.
Economic growth has been moderate so far this year.
The latest figures from Eurostat show that euro area GDP grew by 0.4% in the third quarter compared with the previous one: an increase of 0.9% compared with the same quarter of 2023.
Employment remains historically strong. Households' real incomes continue to recover, along with demand for credit.
And it is encouraging to see that inflation is maintaining its downward path.
Annual inflation in the euro area fell to 1.7% in September from 2.2% in August. A year earlier, the rate was 4.3%.
While these supportive factors are partly offset by a legacy of higher prices, relatively weak investment and subdued business sentiment, we still expect a moderately positive expansion for the remainder of this year and for 2025.
Of course, the economic outlook remains subject to much risk and uncertainty. This includes the war in Ukraine, tensions in the Middle East, and the outcome of this week's US Presidential elections.
The Commission will update its forecast on November 15.
All this highlights the importance of focusing on reforms and investments that increase the EU's growth potential by boosting competitiveness and productivity.
This is why Member States need to keep up the pace of putting their national Recovery and Resilience Plans into effect. Overall, implementation of the Recovery and Resilience Facility is speeding up, as shown in the third annual RRF report that the Commission published last month.
This good pace needs to be maintained and, in some cases, accelerated, given the Facility's end-2026 deadline.
We are on track to see RRF disbursements reach €300 billion by the end of the year. This is close to 50% of the RRF envelope.
To date, the Commission has disbursed 41% of the total amount of grants and loans committed under the RRF.
I would like to take this opportunity to welcome today's endorsement of revised Recovery and Resilience Plans from Czechia and the Netherlands.
Lastly, on Ukraine, which entering a third difficult winter. It is now fighting for its freedom not only against Russians, but also against soldiers from North Korea.
For Ukrainians, winter is being made harder by Russia's intensified attacks on Ukrainian energy infrastructure, which are very damaging for Ukraine's economy and public finances.
According to the IMF's latest update, Ukraine's financing gap could reach US $41.5 billion next year.
The bottom line is that Ukraine urgently needs more financial support to survive – and as soon as possible.
In this context, the good news is that two weeks ago, the Council adopted a financial assistance package for Ukraine.
For the first time, this makes use of revenues stemming from immobilised Russian state assets so that Russia is made to pay for the damage it has caused. As you know, it includes an exceptional macro-financial assistance loan of €18.1 billion and a loan cooperation mechanism provided by the EU and G7 partners.
The mechanism will support Ukraine to repay loans for up to €45 billion, or $50 billion, based on specific contributions that were agreed by G7 partners at end of October.
To avoid the US imposing a high-risk premium on its own loan to Ukraine under the Extraordinary Revenues Acceleration loans initiative, all Member States should move ahead quickly with adopting the last text of the legislative package regarding changes to the EU sanctions regime.
Following the rapid approval of the European Commission's proposal by the European Parliament and Council, the EU was able to take on a leadership role in meeting its commitment for the ERA initiative.
We are now working on a Memorandum of Understanding with Ukraine for this assistance, to be approved by Member States and the Parliament.
And we aim to take all decisions needed for the relevant financial transactions by the end of this year.
Our combined support reconfirms the unwavering commitment of the EU and G7 partners to support Ukraine in its fight for freedom. Thank you very much and I will conclude here.
